According to a new report from Redfin, the median U.S. home-sale price rose 6.1% year-over-year during the four weeks preceding Feb. 11—the largest annual increase posted since October 2022, some 15 months ago.
In tandem with home prices increasing, mortgage rates are rising too, likely exacerbating already-high prices and driving costs up; daily rates are now floating around 7%, while they started the month at 6.6%.
High home costs and mortgage rates are just two factors that are sidelining homebuyers; pending home sales are down 7.3% year-over-year (the biggest decline in four months). In addition to high housing costs, several seasonal factors kept some house hunters at home this past week: extreme storms in Southern California, the Chinese Lunar New Year and the Super Bowl. Sellers are a bit more active than buyers, with new listings up 8% year over year as some homeowners hope to take advantage of rising prices.
“The Super Bowl is like Groundhog Day for real estate economists; we usually have a read on how the market is shaping up by the beginning of February, and the read this year is that it’s looking sluggish so far, mostly because of stubbornly high mortgage rates,” said Redfin Economic Research Lead Chen Zhao. “This week’s hotter-than-expected inflation report confirms that the Fed is unlikely to cut interest rates next month, which means mortgage rates will stay near 7% for now. Activity should pick up a bit in the spring, partly because it’ll be selling season and partly because people are getting more and more accustomed to elevated rates. We expect mortgage rates to start declining later in the spring as inflation eases and the Fed finally starts cutting interest rates.”
Christine Kooiker, a Redfin Premier agent in Grand Rapids, MI, said she’s encouraging homeowners who are thinking about selling to list soon.e
“A lot of sellers want to wait until spring, but I’m telling people to consider listing in the next few weeks because even though demand is fairly slow, there’s hardly anything else on the market,” Kooiker said. “Buyers may want to act sooner rather than later, too, because prices will continue to go up. I have a few clients who waited to make an offer, or made an offer that was too low, and now they regret it because a house they love got snatched up.”
By the numbers:
- Daily average 30-year fixed mortgage rate: 7.09%
- Mortgage-purchase applications (seasonally adjusted): Down 12%
- Google searches for “home for sale”: Down 11%
- Median Sales Price: $352,725
- Median Asking Price: $395,850
- Monthly Median Mortgage Payment: $2,608
- Pending Sales: 72,221
- New Listings: 73,214
- Active Listings: 751,411
- Months Supply: 4.2 months
- Median Days on Market: 50
Click here to see the report in its entirety.
